GM forays into used car market!!

This is a discussion on GM forays into used car market!! within The Indian Car Scene, part of the BHP India category; GM used-car biz to roll out on Jan 15- Automobiles-Auto-News By Industry-News-The Economic Times
NEW DELHI: In keeping with the ...

NEW DELHI: In keeping with the current market slump, where carmakers look for new avenues to increase sales, General Motors India will roll out its used-car retail initiative on January 15 next year.

Branded as ‘Chevrolet OK’, GM will initially open 10 outlets as part of existing Chevrolet dealers in metros like Mumbai, Delhi and Bangalore.

The company will also be launching LPG version of its small car Spark and CNG version of its sedan Aveo in April and June 2009, respectively.

GM India president and MD Karl Slym told ET: “We will provide customers with certified used-cars guaranteed by Chevrolet. The cars will undergo a 110 point check-up and certification.” Mr Slym said that the various expansion plans of GM India will not be impacted by the failure of the $14-billion bailout package that the Big Three—GM, Chrysler and Ford—were expecting from the government back home in the US.

Chevrolet OK, which will deal only in GM’s cars, will be rolled out next month as part of a pilot test. Adds Mr Slym:

“The results should be out by the first half of 2009, after which we will decide expansion plans for Chevrolet OK.” GM has come to realise the advantage of having a used-car business, much like other manufacturers. The organised used-car market in India has grown by over 30% this year.

Used CHEVROLET cars are great value for money, this would in turn also increase the re-sale value of Chevy cars which is currently not really great.

A used car buyer always looks for a fair deal but often does not get it, but these company owned used car showrooms like True Value, Chevrolet OK will definitely take the used car market to the next level, as the customer will have that extra confidence in buying a used car.

I as an individual would never buy a used Chevy car from dealer as it may backfire me, the car may not be of a set standard, but for sure i would walk into Chevy OK and buy the car becuse i would have that belief in the company Chevrolet as compared to what i would have for used car dealer.

I worked for a Pontiac, Buick, GMC dealership in Toronto. A used Pontiac Montana van was sold by me. It got sold the next day too! The second owner got approved for finance immediately and the van was delivered to him. Problem arose when the first owner got approved. Then, the dealership got into overdrive in trying to locate a similar van which they did at a dealership about 120 kms away. That van was bought and we all hoped that the buyer wouldn't recognise that his van was different. Despite it having the same colour and almost same kms the buyer recognised that the van wasn't his. I took the flak for trying to pass off a different car to him, got labelled a slimy and dishonest salesperson until the sales manager swayed in and handed out a $500 discount (which in turn reduced my commission) to soothe his nerves. Ultimately, the owner took the van. After that the sales manager gave me a big long lecture on how I didn't handle the situation properly and asked me why I allowed the buyer to get angry!

Of course to be fair, this was purely a dishonest dealer and GM had nothing to do with it and switching of used cars wouldn't happen in India as our auto sales aren't at North American levels yet but there are plenty of areas in used cars business for hoodwinking the customers.

That does sound more like the workings at an unscrupluous dealer, but it does bring to light another important point. As far as customers are concerned, these dealers are the face of the company. While this is also true for new car dealers, its all the more important in teh case of used cars, because of the higher probability of a faulty vehicle getting sold or cheating on mileage / accident vehicle etc.

Any idea what kind of model GM is planning on following?

The dealer system like Honda's auto terrace or Maruti's true valu? Or as a seperate business entity such as First Choice (Mahindra)?

Most of the company owned used car dealerships have a mark-up of at least 20-25% on the actual market price. In my recent past experiences the IDV (Insurance) on most of the cars was lower by almost 30% than the selling price of the car.
These showrooms also tend to refurbish the car & in some cases end up tampering with the odo readings (digital also) during the refurbishing.

Good news if GM indeed does those 110 point checks and actually 'refurbishes' the cars. In my experience with Maruti True Value (which claims 120 checks) both these are quite cosmetic and in no way justify the premium one pays over the actual market prices.

Ya, that's the best thing according to me that the company could do at this time of falldown. I have heard that the US Government have rejected the bailout package demanded by GM. In this case, a used car business may bring up the lost image of the company. In India, used car market has shown a good growth in recent years.

And my Opel Corsa too..I deserve a new vehicle now after spending so much on petrol

Complain about the Corsa, Sir? Such a strongly built, nice, comfy car? I sorely miss mine, after all these years since I sold my 1.6.

Coming back to the topic, at least in Kerala GM is not selling any new cars in any significant numbers- look at the cars on the road, save for the odd Tavera or Diesel Magnum. Add that to the news of GM's global troubles, people stay away from GM dealerships. Some people even prefer the Rhino over the Tavera. So, getting into used car business might be a good idea, doubly so if you are hardly getting any new sales.

Complain about the Corsa, Sir? Such a strongly built, nice, comfy car? I sorely miss mine, after all these years since I sold my 1.6.

No offences here sir. Sure it is a well build vehicle,almost a tank like body,in my 7 years of driving i dont even have a lose bumper even after countless bangs that it had suffered. But i guess sir 7 years is an awfully long time considering you get a mileage of 8km/L and then there are no takers for it in the used car market, hence my post.